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Kavirajan v. K.S.B.C Ltd.
Judicial Opinion Summary — Kerala State Beverages Corporation Ltd. (Writ Petitions)
Factual and Procedural Background
The writ petitions were filed by employees of the Kerala State Beverages Corporation Ltd. (the Corporation) seeking enhancement of the age of superannuation. The Corporation is a company registered under the Companies Act and fully owned by the Government of Kerala. Under the Articles of Association, service conditions (including retirement age) can be changed only with the Government's permission. The Board of Directors of the Corporation unanimously decided to increase the retirement age from 55 to 58 years, subject to Government concurrence. The Government of Kerala refused to concur by an order dated 2-7-2005 (recorded as Ext. P-3 in W.P.(C) No. 15337 of 2006) on the ground that Government policy was against increasing the age from 55 to 58. That Government order was challenged in these writ petitions under Article 226 of the Constitution. During the pendency of the writ petitions, the Court granted interim orders allowing the employees to continue up to the age of 58.
Legal Issues Presented
- Whether the Government order refusing concurrence to the Corporation's Board decision to raise the retirement age from 55 to 58 is arbitrary and violative of Article 14 of the Constitution of India.
- Whether, in the circumstances of this Corporation (including its profit-making status, absence of a separate pension scheme, membership in the EPF pension scheme, and comparative practices in other public sector undertakings), the regular employees are entitled to continue in service up to the age of 58 as decided by the Board of Directors.
- Whether the Court can or should direct an increase in the age of superannuation in a writ petition under Article 226 where a Board of Directors has already made a recommendation subject to Government concurrence.
Arguments of the Parties
Petitioners' Arguments
- The Board of Directors of the Corporation unanimously resolved to raise the retirement age from 55 to 58, and that resolution required Government concurrence; petitioners challenged the Government refusal.
- Majority of similarly placed public sector undertakings owned by the Kerala Government have fixed retirement at 58 (and in some cases 60), whereas this Corporation's regular employees were singled out to remain at 55, resulting in hostile discrimination.
- The Corporation has no separate pension scheme; employees are members of the Employees' Provident Fund and the EPF Pension Scheme requires reaching age 58 to obtain full pension benefits, creating a concrete justification for raising the retirement age to 58.
- Some similarly placed public sector undertakings (including one cited example, LBS Centre) extended retirement age to 58 for the purpose of EPF pension eligibility, and the Government approved such decisions; there is therefore no consistent Government policy barring 58 as a retirement age.
- The petitioners alleged that the Government's rejection lacked rational basis and amounted to discrimination contrary to Article 14.
Respondent / Government Arguments
- The Government's stated position (as reflected in its order dated 2-7-2005) was that Government policy was against increasing the age of superannuation from 55 to 58 for the Corporation; that refusal is the impugned action.
- It was acknowledged by the Government Pleader that abkari workers could be extended to age 60 (and the record shows orders and Government decisions to that effect); the Government did not object to such an extension for abkari workers.
- The opinion notes the well-settled proposition that a court cannot, by itself, increase a Government employee's age of retirement; such policy decisions are for the Government to take.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| British Paints (India) Ltd. v. Workmen (AIR 1966 SC 732) | The opinion quoted the Supreme Court's observation that, given improvements in health and longevity, "generally speaking ... fixing the age of retirement at 60 years would be fair and proper, unless there are special circumstances justifying fixation of a lower age of retirement." | The Court invoked this passage to support the proposition that, as a general matter and on changing circumstances, a higher retirement age is appropriate and to reinforce the reasonableness of raising retirement ages where no special circumstances justify a lower age. |
| Osmania University v. V. S. Muthurangam ((1997) 10 SCC 741) | The opinion referred to the decision; the text does not elaborate a specific principle from the case within the provided opinion's body. | The Court referred to this decision in relation to its reasoning on retirement-age considerations; the opinion does not set out an explicit rule taken from Osmania University beyond noting the reference. |
Court's Reasoning and Analysis
The Court approached the matter step by step, applying the facts before it to constitutional and comparative-policy considerations described in the record:
- The Court recognized the limit on judicial power: ordinarily the Court cannot itself direct a Government or Government Corporation to increase the age of superannuation, because those are policy decisions for the Government. The opinion expressly states it is a "well-settled principle that Government employees' age cannot be increased by an order of the court."
- Despite that general principle, the Court found the factual matrix here materially different: the Corporation's Board of Directors (the managing authority) had unanimously resolved to raise the retirement age to 58, subject to Government concurrence. That resolution was reasonable in the view of the Court given the Corporation's circumstances.
- The Court examined comparative practices across Government-owned undertakings in Kerala and elsewhere: out of 113 undertakings, many had retirement age fixed at 58 and several at 60; central Government undertakings in Kerala had retirement age 60; some specific government companies had retirement fixed at 55 but those often had good pension schemes (e.g., KSRTC, KSEB, Kerala Water Authority, Kerala State Housing Board).
- Turning to the Corporation's internal composition and pension entitlements, the Court noted the following facts from the record:
- The Corporation employed about 2,700 persons: 339 regular workers (subject to 55), about 1,500 abkari workers, and about 650 employees deputed from other corporations where retirement was 58.
- Abkari workers were members of the Abkari Workers Welfare Fund Board with a superannuation age of 60; deputationists ordinarily served up to 58 in their parent organizations; abkari workers were permitted by Government decision to continue to 60.
- The Corporation's employees were members of the Employees' Provident Fund; under the EPF Pension Scheme (effective from 1995), attaining age 58 is relevant to entitlement for full pension benefits. The Corporation itself recorded a resolution recommending increasing retirement age to 58 so its employees could obtain pension benefits under EPF pension scheme.
- Given the above, the Court found an absence of rational basis for the Government to single out the regular employees of this profit-making Corporation for retention at 55 when:
- the majority of similar public sector undertakings had 58 (and some 60) as retirement ages,
- many employees in the Corporation already had or could continue service beyond 55 (abkari workers to 60, deputed employees to 58), and
- the EPF pension scheme required 58 for full pension benefits, creating a concrete and justifiable reason to adopt 58 for the Corporation too.
- The Court concluded that the Government's refusal to concur with the Board's recommendation was arbitrary in the circumstances and amounted to discriminatory treatment violative of Article 14 of the Constitution, because similarly situated employees in other undertakings (and even within the same Corporation) were permitted to work till 58 or 60.
- On the point of abkari workers, the Court accepted the Government's position and prior orders allowing abkari workers to continue to 60 and explicitly stated it would not interfere with that arrangement.
Holding and Implications
Holding (Core Ruling): The writ petitions were allowed to the extent that the regular employees of the Kerala State Beverages Corporation are entitled to continue in service up to the age of 58 years as had been decided by the Corporation's Board of Directors. The Government's refusal to concur with the Board's recommendation was held to be in violation of Article 14 of the Constitution of India. The Court did not interfere with the Government's decision (and earlier orders) permitting abkari workers to continue up to age 60.
Implications:
- Direct effect on the parties: Regular employees of the Kerala State Beverages Corporation who otherwise would have retired at 55 are entitled to continue in service until 58, aligning their treatment with the Board's resolution and comparable practices noted in other undertakings.
- Abkari workers: The Court left undisturbed the Government's orders allowing abkari workers to continue up to 60.
- Precedential scope: The opinion resolves the dispute on the facts and administrative record before the Court. The opinion does not assert that it is establishing a broader binding rule beyond the facts; the judgment rests on the factual circumstances, Board resolution, comparative practices and the Court's finding of arbitrariness in the Government's refusal. No broader new precedent beyond the decision's reasoning is expressly claimed in the opinion.
All statements in this summary are drawn exclusively from the text of the provided judicial opinion; no additional facts or inferences have been introduced.
J.B Koshy, J.:— All these Writ Petitions are filed by the employees of the Kerala State Beverages Corporation Ltd. (hereinafter referred to as the Corporation) for enhancing the age of superannuation. Kerala State Beverages Corporation Ltd. is a Company registered under the Companies Act and it is fully owned by the Government of Kerala. As per the Articles of Association, service conditions of the employees including retirement age can be changed only with the permission of the Government. Management and administration of the company is done by the Board of Directors of the company. Decisions of the board are not generally interfered by the Government unless it is against the policy of the Government or against the interest of the Government. Board of Directors of the company unanimously decided to increase the retirement age to 58 subject to consonance of the Government. But, the Government of Kerala refused to concur with the decision of the Board of Directors by order dated 2-7-2005 (produced as Ext. P-3 in W.P(C). No. 15337 of 2006) on the ground that Government policy is against increasing the age of superannuation to 58 from the age of 55. This order is challenged in all these Writ Petitions.
2. There are 113 public sector undertakings owned by the Kerala Government out of which in seven undertakings like Kerala Agro Industries Corporation Ltd. etc. the retirement age of employees is 60 years. In majority of the undertakings, now the retirement age is 58 years. In Public sector undertakings of Central Government in State of Kerala the age of superannuation is 60. In Travancore Sugars & Chemicals Ltd., one of the Kerala Government Company, the age of retirement is 60 and it is a sick industry. The Board of Directors decided to reduce the age to 58 as it is a sick industry, but, Government decided to roll back the retirement age to 60 years itself as can be seen from Ext. P-8 in W.P (C). No. 15337 of 2006 dated 24-6-2006. However, even though in five companies the retirement age is 55 years, in majority of the public sector undertakings owned by the Kerala Government, the retirement age is 58. The retirement age of the Government employees in Kerala is only 55, but, Government employees have got various chances of promotion and they are entitled to get Government pension.
3. Even though in five of the Government Companies the age of retirement is 55, the major Government Companies where retirement age is fixed as 55 are four in number viz., Kerala State Road Transport Corporation, Kerala State Electricity Board, Kerala Water Authority and Kerala State Housing Board. In those undertakings there is a good pension scheme. But, as far as Kerala State Beverages Corporation is concerned, there is no pension scheme. Of course, they will be entitled to some sort of contributory pension because of the pension scheme under the Employees Provident Fund Pension Scheme. But, for entitlement of full pension, they have to attain the age of 58. In another similarly placed public sector undertaking (LBS Centre), Directors decided to extend the age of retirement from 55 to 58 so as to get the pension from EPF pension scheme. Ext. P-4 is produced to prove the same. In paragraph 1 of Ext. P-4 it is stated as follows:
“The Director, LBS Centre for Science and Technology has reported that the centre is following the EPF pension scheme andas per the EPR pension scheme 1995, a member is eligible for superannuation after attaining the age of 58 years. Hence the Governing Body of the centre at its 19th meeting held on 22-10-2001 had decided to fix the retirement age of its members at 58 years.”
4. The Government approved the above decision. There is no need to discriminate Beverages Corporation employees.
5. In 90% of the Government Companies, where there is no pension scheme like Government, age of retirement was increased to 58 and in some Government Companies retirement age is 60. Hence it cannot be contended that policy of the Government is not to increase the retirement age to 58. This Corporation is one of the few Government Companies which earns profits and no grounds are stated in Ext. P-3 indiscriminating this Corporation from other Government Companies on the ground of policy. Petitioners have to be treated at par with other Government employees especially when Board of Directors decided so considering the fact of absence of pension scheme etc.
6. During the pendency of the Writ Petitions, the employees were allowed to continue up to the age of 58 by various interim orders of this Court. The whole question is whether the Government Order in not approving the resolution of the Beverages Corporation in increasing the retirement age to 58 is arbitrary so as to get interference from this court as it is violative of Art. 14 of the Constitution of India. It is true that this court by its own cannot direct the Government or Government Corporation to increase the age of superannuation in a petition under Art. 226 of the Constitution of India. It is well-settled principle that Government employees' age cannot be increased by an order of the court. It is for the Government to take a policy decision. Here, the entire scenario is different. The respondent Corporation is a profit making Corporation. Board of Directors decided to increase the age of superannuation considering various circumstances especially considering the fact that in majority of the similarly placed public sector undertakings, the age of retirement was adopted as 58 and also considering the fact that even for getting contributory pension under the Employees Provident Fund Scheme, the employees have to attain the age of 58 and majority employees of the Corporation, superannuation age is 60 and 58 and the Board decided so, of course, subject to the Government concurrence. The case of the petitioners is that even in sick industries, the age of retirement is 60 in certain cases and 58 in majority cases unless there is a separate beneficiary pension scheme. There is no rhyme and reason for the Government to reject the recommendation of the Board of Directors. In this connection, we refer to the decision of the Supreme Court in British Paints (India) Ltd. v. Workmen (AIR 1966 SC 732) where it was held by the Supreme Court as follows:
“But time in our opinion has now come considering the improvement in the standard of health and increase in longevity in this country during the last fifty years that the age of retirement should be fixed at a higher level, and we consider that generally speaking in the present circumstances fixing the age of retirement at 60 years would be fair and proper, unless there are special circumstances justifying fixation of a lower age of retirement.”
7. After considering reports of various committees, the retirement age of Central Government employees was enhanced to 60. The present conditions cannot be lost sight of. The total number of employees employed in the Corporation is about 2700 out of which 339 employees are regular workers, about 1500 workers are abkari workers and about 650 employees are deputed from other Corporations where retirement age is 58. These deputationists are allowed to work in the Corporation on deputation even beyond their age of 55 years up to 58 years. For getting pension under the Abkari Welfare Scheme, abkari workers have to work up to the age of 60. Government Pleader submitted that they have no objection in extending the age of superannuation of the abkari workers of Beverages Corporation to 60. The orders are passed and Government decision is mentioned in the counter-affidavit. These abkari workers were also absorbed by the Corporation when retail shops were nationalized. These abkari workers are members of the Abkari Workers Welfare Fund Board which has the superannuation age as 60 years. Hence, the permanent abkari workers who are employees of the Corporation have their retirement age fixed as 60 years. Hence, majority of employees in this Corporation itself can work beyond 58 years whereas only minority of 339 regular workers have to retire at the age of 55.
8. In this connection, we also refer to the decision of the Apex Court in Osmania University v. V.S Muthurangam ((1997) 10 SCC 741). The employees of the Corporation are members of Employees' Provident Fund. In the Employees Provident Fund a separate Employees Provident Fund Pension Scheme has been introduced effective from 1995. The Pension Fund Scheme envisages pension contribution by the employee/employer up to the age of 58 years of an employee for me employee to get the full benefit of pension under me scheme. Hence, the following resolution was passed by the Corporation:
“Resolved to recommend to Government the raising of retirement age in the Corporation from 55 years to 58 years as is followed in Public Sector Companies and place proposals before the Government.
We request that the decision of the Corporation's Board of Directors to raise the retirement age of the employees of K.S.B.C from 55 years to 58 years and incorporate suitable amendment in clause 43 of the Service Rules.”
9. When the abkari workers' age is also increased to 60 and the deputed workers are working up to 58, there is no rhyme or reason to say that regular workers should be retired at the age of 55. Even though they are not entitled to the pension like the Government employees, there is no reason for rejecting the proposal of the Corporation in extending the age of superannuation up to 58 and that rejection is in violation of Art. 14 of Constitution of India There is hostile discrimination between similarly placed employees in other Corporations and even the employees working in the same Corporation. We hold that the regular employees of the Kerala State Beverages Corporation are entitled to continue till the age of 58 as decided by the Director Board of the Corporation and rejection of the above request by Government is violation of Art. 14 of the Constitution of India. Of course, as decided by the Government, abkari workers can continue up to the age of 60 and we are not interfering with the above order.
10. All the Writ Petitions are allowed to the above extent.
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